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Gabon: Issues in the Oil industry Sector

On Monday, April 8, oil industry workers returned to work following an announcement made to AFP by Arnauld Engandji, spokes-person for ONEP (the National Organization for Petrol Industry Workers), stating “the demands have been met.  We do not want to cause chaos”.  ONEP, an organisation of between 4000 and 5000 members, went out on strike (fr) to obtain new regulations relating to the employment of foreign workers within the sector, who “they accuse of taking the place of Gabonese workers”.  The strike has cost (en) the government and oil companies some 131 million US dollars .

Shortly after the return to work was announced (en), Total Gabon announced that it “was going to make available 20 billion Central African CFA francs to finance the renovation of Port-Gentil airport, (fr) through the PID fund (Diversified Investment Provision), according to the terms of an agreement signed recently between the oil company and the Gabonese government.”

On the afrique-espoir (hope-Africa) blog Benoit Thelliez explains the details of the renovation plans (fr)

The short term aim is to lengthen the runway in order to allow super-carriers like the Boeing 777 to land, then to completely rebuild the airport terminal building once the the current building has been totally demolished.  The first phase should not take very long to complete explains Jean-Philippe Magnan, Managing Director of Total Gabon, who expects to see “the first commercial flights (Ed: international) before the end of 2011″.  Ultimately, the new airport, which will also be endowed with a presidential wing, should be completed in 2012.

Thelliez adds:

The PID fund has existed in Gabon since 1974 and was originally managed by the French International Bank of Africa.  The money is paid out of ministerial funds “in proportion to their [the oil companies’] turnover and is tax free.  The size of this fund is set on an annual basis as per the agreement between the administrative authorities who act as trustees of the fund and the oil companies, and depend on the agreed investments.  In theory, this cannot exceed 10% of the actual turnover of the company.”
These funds are set aside by the oil companies “to finance economic, social or educational investment which the government requires them to carry out.”

This initiative has come at the right time as oil production is declining and the State needs to boost investment in the rest of the economy.
Stéphane Ballong explains (fr):

It has to be said that oil production in Gabon has been stagnating for the past few years.  From 371000 barrels per day (b/d) in 1997, it progressively slowed to a rate of 243000 b/d in 2007.  Since then it has remained around 250 000 b/d, according to official figures.  Unless a major new discovery is made which would allow for a significant upturn within the sector, the watch word of the Gabonese oil industry remains, for the time being, revamping the more marginal fields and using new technologies to increase production from the more mature fields.

This petroleum fund has often been more profitable for electoral campaign outside of Gabon that at home.  As such the Wikileaks revelations confirm systemic corruption (fr)within Gabonese financial systems.

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